2007 News Releases

For immediate release: February 28, 2007

Globalization and Economic Freedom Lead to Price Stability
and Growth in Former Soviet Bloc, According to Dallas
Fed’s Economic Letter

DALLAS—Ex-Soviet bloc countries
with freer economies are growing faster than their counterparts
with unfree economies, according to the February issue
of the Federal Reserve Bank of Dallas’ Economic
Letter.

In “After the Fall: Globalizing
the Remnants of the Communist Bloc,” senior economic
analyst Julia Carter examines the economic conditions
in the 27 countries that made up the former Soviet bloc.

“Among the nations once
part of the Soviet empire, faster growth and price stability
go along with greater economic freedom—a result
consistent with other parts of the world,” writes
Carter.

Carter analyzes the economic conditions
in the former Soviet countries, comparing their ranking
on the Heritage Foundation/Wall Street Journal 2007
Index of Economic Freedom with their economic growth
from 1993 to 2005. Countries that ranked as moderately
or mostly free on the Heritage/WSJ index grew faster
than countries that ranked as unfree or repressed.

Some unfree countries, such as
Ukraine, Tajikistan and Moldova, actually saw their
economies contract.

Carter also scrutinizes the level
to which countries in the former Soviet bloc have globalized,
noting some progress. The region received $72 billion
in foreign direct investment in 2005, or more than 7.9
percent of the world’s total, nearly eclipsing
China and India.